VIVO Energy, a subsidiary of global commodities trader Vitol, is set to make a significant investment of 10 billion rand ($550.79 million) in its South African operations following its merger with Engen, according to South Africa’s trade minister Ebrahim Patel.
This investment comes as part of a series of commitments made by VIVO Energy to prevent job losses and maintain supply contracts with local refineries, as required by domestic regulators during the merger process.
During a signing ceremony with senior company executives, Patel announced that VIVO Energy has committed to investing the initial 10 billion rand over the next five years in areas such as green energy, infrastructure, and operational upgrades. Additionally, there is a possibility of a further 4 billion rand investment in biofuel production and marine infrastructure, subject to feasibility.
In a move to support workers, there is a provision for workers’ ownership in the company, which will be financed through a vendor funding mechanism to ensure that workers do not have to pay for their shares directly.
The agreement also includes commitments from Engen to continue purchasing fuel from local refineries, providing a significant boost to maintain and expand oil refining locally.
With the completion of the merger between Engen and VIVO Energy, the combined group now boasts over 3,900 service stations and more than 2 billion litres of storage capacity across 28 African markets.
Harvey Foster, Vitol’s country manager, emphasized the company’s commitment to Africa and South Africa as key areas for investment, highlighting the importance of the merger in expanding their presence in the region.